Devon Energy Corp. got an infusion of cash Wednesday as it continues remaking itself as a fast-growing oil producer.
Devon completed the sale of its conventional natural gas assets in Canada in a deal that is expected to net $2.7 billion after taxes and currency exchange.
That cash will be used to repay the debt Devon incurred from its $6 billion purchase of 82,000 net acres in south Texas’ Eagle Ford Shale. The deal with GeoSouthern Energy was completed Feb. 28.
Company officials expect that acreage to help Devon increase its oil production by 40 percent this year, as it focuses its operations in five core plays and two developing areas.
Some non-core assets in Devon’s portfolio are on the block.
“This initiative further sharpens Devon’s focus on core assets, delivering material growth rates or substantial free cash flow,” CEO John Richels said in the company’s Feb. 19 earnings call.
Devon intends to open data rooms soon to allow would-be buyers to learn about the assets the company is selling in Oklahoma, Kansas, Texas, Louisiana, Kansas, Wyoming and Utah. Those holdings were not expected to yield material production growth for Devon.
The company hopes to complete its asset divestitures by the end of the year.
Devon’s deal with Canadian Natural Resources Limited was the first asset sale announced after the Oklahoma City company cemented its move into the Eagle Ford. The deal is worth $3.125 billion in Canadian dollars, or about $2.8 billion. Taxes will reduce that to about $2.7 billion.
About 750 Devon employees moved to Canadian Natural Resources as a result of the deal, leaving the company with about 1,300 employees in its Calgary office.